Chevron Deference and Administrative
Rule Making in Minnesota
David Schultz, Professor
Hamline University
September 26, 2013
651.523.2858
dschultz@hamline.edu
(To request electronic copy of this summary)
I.
Introduction
A.
Talk today will discuss the interaction between state and federal administrative
law
B.
Will examine Chevron v. NRDC and what it means
C.
Look at recent US Supreme Court decision expanding the Chevron decision
D.
Speculate on the impact of this decision for Minnesota administrative law
II.
Relationship between federal and state law
A.
Federal law is supreme (Supremacy Clause)
B.
State law can not be inconsistent with federal law but it may carve its own path
C.
States final arbiter of own Constitution, laws, and rules
D.
The continued impact of federal case law upon Minnesota law
1.
Sometimes State of Minnesota has made a choice (when allowed) to
follow or depart from federal rules or precedents
III.
The Problem of Deference
A.
When administrative agencies act or make decisions, what type of deference
should the courts give to those rules?
B.
Many questions need to be asked
1.
Were agency decisions quasi-judicial of quasi-legislative?
a.
David Schultz, “Quasi-judicial and Quasi-legislative Hearings in
Minnesota,” Bench & Bar of Minnesota, 15 (September, 2003).
IV.
Traditional Rule of Minnesota Judicial Deference to Administrative Agency
Decisions
A.
Reserve Mining Co. v. Herbst, 256 N.W.2d 808 (Minn. 1977)
1.
Administrative decisions “enjoy a presumption of correctness.”
2.
deference may be appropriate in light of an agency’s technical expertise.
B.
St. Otto’s Home v. Minnesota Department of Human Services, 437 N.W.2d 35
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C.
D.
(Minn. 1989)
1.
“Considerable deference” to a state agency’s interpretation of ambiguities
in its own state regulations.
In the Matter of the Excess Surplus Status of Blue Cross and Blue Shield of
Minnesota and Zachman, et al., 624 N.W.2d 264 (Minn.,2001).
1.
“The agency decision-maker is presumed to have the expertise necessary
to decide technical matters within the scope of the agency’s authority, and
judicial deference, rooted in the separation of powers doctrine, is extended
to an agency decision-maker in the interpretation of statutes that the
agency is charged with administering and enforcing. (Italics in the
original)
Minnesota has forged its own path regarding judicial deference to agency
interpretations.
V.
Federal Rules of Judicial Deference to Administrative Agencies
A.
Deference to reasonable agency interpretations of law if statute is silent or
Congress has not spoken on the issue. Chevron U.S.A. Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984)
B.
Chevron deference to an agency interpretation only due if it is clear that Congress
intended to give it the authority to make rules carrying the force of law. United
States v. Mead Corp., 533 U.S. 218, 229, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001)
("[A] very good indicator of delegation meriting Chevron treatment [is an]
express congressional authorizatio[n] to engage in the process of rulemaking or
adjudication that produces regulations or rulings for which deference is claimed").
C.
If Congress did not intend to give rule making authority then apply the persuasive
test of Skidmore v. Swift & Company, 323 U.S. 134, 140 (1944) (“The weight of
such a judgment in a particular case will depend upon the thoroughness evident in
its consideration, the validity of its reasoning, its consistency with earlier and later
pronouncements, and all those factors which give it power to persuade, if lacking
power to control.”).
D.
Not every decision of an agency deserves Chevron deference. Christensen v.
Harris County, 529 U.S. 576 (2000) (Interpretations such as those in opinion
letters–like interpretations contained in policy statements, agency manuals, and
enforcement guidelines, all of which lack the force of law–do not warrant
Chevron-style deference.”).
E.
Deference applies only within the scope of the statutory ambiguity, as determined
by the court. Cuomo v. The Clearing House Ass’n , 557 U.S. 519 (2009)
VI.
Chevron and Minnesota Administrative Law
A.
Driven by former Justice Paul Anderson
B.
Chevron citations by the Minnesota courts
C.
Creating hybrid law
D.
In the Matter of the Cities of Annandale and Maple Lake NPDES/SDS Permit
Issuance for the Discharge of Treated Wastewater, and Request for Contested
Case Hearing, 731 N.W.2d 502 (Minn. 2007).
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1.
2.
3.
Facts: Cities of Annandale and Maple Lake sought issuance of a National
Pollutant Discharge Elimination System (NPDES) permit by the
Minnesota Pollution Control Agency (MPCA) for a wastewater treatment
plant jointly operated by the two cities. MPCA found that the proposed
plant—when operating at capacity—would increase phosphorus discharge
to the North Fork of the Crow River by approximately 2,200 pounds per
year over that which is discharged by the Cities’ existing facilities, but the
MPCA concluded that, under 40 C.F.R. § 122.4(I) (2006), this increase
would not contribute to the violation of water quality standards in the Lake
Pepin watershed. MPCA placed a draft proposed permit “on public notice”
and held a public hearing. MPCA received comments from respondent
Minnesota Center for Environmental Advocacy (MCEA) and others, and
responded in writing to the comments. MPCA held a meeting at which
MPCA staff members, MCEA representatives, and members of the public
discussed the draft proposed permit and the MPCA’s proposed findings of
fact, conclusions of law, and order. MCEA’s concern that issuance of the
NPDES permit would violate 40 C.F.R. § 122.4(I), which provides in part
that a state may not issue an NPDES permit “[t]o a new source or a new
discharger, if the discharge from its construction or operation will cause or
contribute to the violation of water quality standards.” MCEA asserted
that the proposed plant’s increase of phosphorus discharge would
necessarily cause or contribute to the violation of water quality standards
in Lake Pepin. MPCA recommended approval of the draft NPDES permit
and issued findings. MCEA appealed to Court of Appeals and a divided
Minnesota Court of Appeals reversed the MPCA.
Issue: Did the MPCA err in issuing a NPDES permit because it wrongly
concluded that the increased phosphorus discharge into the Lake Pepin
watershed would not violate 40 C.F.R. § 122.4(I) (2006)? No. Reversed.
Reasoning: The Court saw the issue here as novel: “[O]n several
occasions [we have been asked] to determine whether and how much
deference courts should give to administrative agency interpretations of
regulations, we have not yet addressed the precise question presented
here—whether courts should defer to a state agency’s interpretation of a
federal regulation when the state agency is charged with enforcing and
administering the federal regulation.” The Court noted that it agreed with
the U.S. Supreme Court that “an agency’s ‘own regulation’ may include a
regulation that the agency is legally required to enforce and administer,
even if the regulation was not promulgated by the agency.” The Court
found this deference to agency interpretation is rooted in the concept of
separation of powers. Drawing upon the U.S. Supreme Court decision
Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 84243 (1984) the MN Supreme Court stated that it will not defer to agency
constructions when the regulation’s language is clear and capable of
understanding, but if ambiguous, unclear, or susceptible to different
interpretations, the courts should defer to an agency’s interpretation of its
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4.
5.
own regulations when the language of the regulation is subject to a
construction that is so technical in nature that only a specialized agency
has the experience and expertise needed to understand the regulation.
Here, the MPCA was entrusted to enforce 40 C.F.R. § 122.4(I) (2006), the
law was not clear, and therefore the Court was willing to defer to the
technical knowledge of the agency in its interpretation of the regulation.
Why is this case significant? Chevron deference has been a staple of the
federal courts since 1984. Minnesota, unlike many other states, has not
traditionally operated according to the exact logic of Chevron. See e.g.:
William R. Anderson, Chevron In the States: An Assessment and a
Proposal, 58 ADMIN. L. REV. 1017 (2006) (discussing Chevron-style
deference at the state level). Instead, as the Minnesota Supreme Court
states in this case, it has followed rules of deference articulated in St.
Otto’s Home v. Minnesota Department of Human Services, 437 N.W.2d
35 (Minn. 1989), where it noted that “considerable deference” is given to
an agency’s construction of its “own regulation.” While the Court here
seems to believe that Chevron and St. Otto’s Home are similar in their
rules on agency deference, there are profound differences. In the Matter
of the Cities of Annandale and Maple Lake thus appears odd because
federal rules of judicial deference to agency interpretations are being
imported into state law. The case represents a clash of perhaps differing
rules of construction. I read the case as either developing unique law
when state agencies are construing federal laws they must enforce where
Chevron rules now apply, or as a possible regime change where the
Chevron rules for deference may now come to play in Minnesota. Watch
for this trend and be prepared to argue Chevron in state court now.
Important Dicta in this case: “In summary, we glean from our case law
that review of an agency’s interpretation of its own regulations is a
question of law that courts review de novo. When answering this question,
there are several factors courts need to consider when determining whether
to give deference to an agency’s interpretation. These factors include
whether the agency is legally required to enforce and administer the
regulation under review and whether the meaning of the words in the
regulation is clear and unambiguous or is unclear and susceptible to
different reasonable interpretations—ambiguous. If a court concludes the
meaning of the words in the regulation is clear and unambiguous, it need
not defer to the agency’s interpretation and may substitute its own
judgment for that of the agency. If a court concludes that the meaning of
the words in an agency’s regulation is unclear and susceptible to different
reasonable interpretations, the court must then determine whether the
agency’s interpretation is reasonable. When determining whether an
agency’s interpretation is reasonable, courts may consider the agency’s
expertise and special knowledge, especially when the construction of the
regulation’s language is so technical in nature that the agency’s field of
technical training, education, and experience is necessary to understand
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the regulation. When a court concludes that the language of the agency’s
regulation is unclear and susceptible to different reasonable interpretations
and that the agency’s interpretation of the regulation is reasonable, then
the court will generally defer to the agency’s interpretation.”
VII.
New Developments in Chevron deference
A.
Arlington v. Federal Communications Commission, U.S.
(2013).
1.
Facts:
Two cities petitioned for review of declaratory ruling of the
Federal Communications Commission (FCC) establishing reasonable time
frames under the 1996 Telecommunications Act for a state or locality to
act on wireless facility siting applications. They contended that the FCC
lacked jurisdiction to issue these time frames because it lacked the
authority to interpret its own ambiguous provisions. The United States
Court of Appeals for the Fifth Circuit denied the petitions in part and
dismissed the petitions in part. Cert. to the Supreme Court.
2.
Issue: Does the FCC have the statutory authority under the 1996
Telecommunications Act to establish time frames for local governments to
act on siting applications? Yes
3.
Reasoning: Under Chevron v. NRDC a court should defer to an agency
construction of a statute if the statute is ambiguous and if the agency has
constructed a permissible interpretation of the statute. Here the issue is
whether a court must defer under Chevron to an agency's interpretation of
a statutory ambiguity that concerns the scope of the agency's statutory
authority (that is, its jurisdiction). The Court rules that even when it
comes to jurisdictional issues, unless the law clearly prohibits the agency
from ruling on its own jurisdiction, Chevron deference permits an agency
to construe its own jurisdiction.
4.
Why significant? An important federal extension of the Chevron doctrine
that might trickle down to the state level.
VIII. Conclusion
A.
Arlington v FCC and its impact on Minnesota law?
B.
Impact of Justice Paul Anderson?
C.
Questions?
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